Renewable energy opportunity for EU-China development cooperation

Photovoltaic installation. [Shutterstock/wadstock]

This article is part of our special report EU-China cooperation on climate change.

Cooperation in the renewable energy sector, such as hydropower, wind power and photovoltaic, between China and countries along the Belt and Road Initiative (BRI) or third countries has significantly grown in recent years. A senior scientist suggests an EU-China partnership could benefit all involved.

“If we work together with Europe on this, we will be able to ensure that the installation of photovoltaic stations has a much lower, perhaps even positive, ecological impact,” He Jijiang He Jijiang, executive deputy director of the Institute of Energy Transition and Social Development at Tsinghua University, said in an interview with EURACTIV.

“For example, installing PV generation in Africa together would not only provide power but also jobs,” he added.

“There is already an example: we have investment in a photovoltaic power plant in Pakistan, which is as big as 300 million VAT,” He Jijiang said.

China has established 58 bilateral cooperation projects and participated in 33 multilateral cooperation projects with other countries.

This July, three Chinese electric power firms – FIEDMC, Henan Zhonghui Electric Power Engineering and Consulting Company and a subsidiary of  Power China – agreed to set up 700MW photovoltaic power project in Faisalabad, Pakistan.

However, he acknowledged that the investment and development of photovoltaic installations have caused problems in Pakistan as the cost of photovoltaic electricity is already lower than the traditional electricity production, which, according to He Jijiang, has prompted opposition to the development of photovoltaic electricity.

“Maybe in the future, Europe and China can cooperate together and provide guidance and suggestions or even stimulations in Pakistan and other countries to guide them to clean, green energy,” he suggested.

He believes China’s grid planners could learn from the European experience.

“Chinese development of photovoltaic and green energy has come thanks to European technology, as in the very beginning of the Chinese photovoltaic development we have gotten a lot of support and experience from Europe, especially from Germany,” He Jijiang said.

But the tables have turned, suggested the scientist, as China has become the biggest country for the production of the photovoltaic panels and replaced Germany at the top of the rankings.

However, despite recent climate pledges, China’s Belt and Road foreign investment programme invests primarily in fossil fuel energy projects in third countries.

Africa is the second-largest region in supplying oil and gas to China, after the Middle East, with over 25% of its total imported oil and gas, which is why China’s national oil companies are investing heavily in the exploration and production of oil and gas supplies in Africa. That has prompted some concerns among African government officials that they could be caught by the EU’s proposed Carbon tax.

Meanwhile, the European Commission and European Investment Bank have focused on providing financial support to renewable energy projects on the African continent.

Asked whether he expects a greening change in foreign investment in the future, He Jijiang said the idea of combining photovoltaic investment together with the ecological benefit with investment in the Silk Road project.

According to him, one way China could learn from Europe is that they could cooperate together in the scientific area and support third countries in Africa, where China has growing economic and political influence.

“For example, now we are promoting work to develop and research green standards, which can be used in different countries, especially for the ecological benefit, for example, that exists and we could work together and to support Africa,” he said.

According to the Chinese scientist, such a standard could make the ecological benefit of photovoltaic power plants measurable.

“China now has the power of investment in Africa, but we haven’t got enough experience in this kind of development projects – and this is what we should learn from Europe, which has more experience with development and investment in Africa,” he added.

However, China is expected to consume less raw materials and be more selective in its foreign lending and investment activities over the coming decade.

In a recent report, German insurer Allianz and its credit insurance subsidiary Euler Hermes argued that China may no longer be able to provide Africa with the same amount of funding, taking the form of loans, investment and trade, as it has in recent years.

“On top of the very strong Chinese-African partnership, the billions of dollars’ worth of projects associated with the Belt and Road Initiative and the harnessing of primary commodities makes it crystal clear that China is here to stay in Africa,” Arthur Minsat, head of unit for Africa at the OECD Development Centre, said.

Nevertheless, the authors “expect China to slow its international engagement over the next few years” due to a change in the country’s growth model and economic slowdown over the coming decade.

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